The Impact of the Coast Guard Authorization Act on Ship Finance

The most sweeping changes to US maritime laws in many years are contained in the Coast Guard Authorization Act of 1996, enacted and signed into law on October 19th, according to Dennis Bryant, an attorney in the Washington office of the law firm Haight, Gardner, Poor & Havens.

Mr. Bryant spoke at a seminar given by the firm on October 25 for members of the shipping industry and the financial community.

The new law eliminates all restrictions on persons eligible to be mortgagees of US flag vessels, and allows leasing companies to own vessels operating in the coastwise trade under demise charter to US citizens. Further, it permits its use of ownership trusts with non-citizen beneficiaries in financing vessels involved in cross-border transactions – the US foreign trade – without restrictions as to who may be a charterer.

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